Correlation Between Intact Financial and Manulife Financial

Can any of the company-specific risk be diversified away by investing in both Intact Financial and Manulife Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Intact Financial and Manulife Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intact Financial Corp and Manulife Financial Corp, you can compare the effects of market volatilities on Intact Financial and Manulife Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Intact Financial with a short position of Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Manulife Financial.

Diversification Opportunities for Intact Financial and Manulife Financial

0.48

Correlation Coefficient

Intact Financial  Manulife Financial

Very weak diversification

The 3 months correlation between Intact and Manulife is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and Manulife Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial Corp and Intact Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Intact Financial Corp are associated (or correlated) with Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial Corp has no effect on the direction of Intact Financial i.e., Intact Financial and Manulife Financial go up and down completely randomly.

Pair Corralation between Intact Financial and Manulife Financial

Assuming the 90 days trading horizon Intact Financial is expected to generate 1.56 times less return on investment than Manulife Financial. But when comparing it to its historical volatility, Intact Financial Corp is 1.31 times less risky than Manulife Financial. It trades about 0.35 of its potential returns per unit of risk. Manulife Financial Corp is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest  2,039  in Manulife Financial Corp on April 24, 2025 and sell it today you would earn a total of  401.00  from holding Manulife Financial Corp or generate 19.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Intact Financial Corp  vs.  Manulife Financial Corp

Intact Financial Corp

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Intact Financial Corp are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Intact Financial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Manulife Financial Corp

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Manulife Financial Corp are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal fundamental indicators, Manulife Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intact Financial and Manulife Financial

The main advantage of trading using opposite Intact Financial and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, Manulife Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Manulife Financial will offset losses from the drop in Manulife Financial's long position.

The idea behind Intact Financial Corp and Manulife Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.